A draft, an instrument normally used in international commerce to effe

QUESTION

A draft, an instrument normally used in international commerce to effect payment, is also known as a letter of credit.

Indicate whether the statement is true or false.

ANSWER

FALSE
A draft, sometimes referred to as a bill of exchange, is the instrument normally used in international commerce to effect payment. A draft is simply an order written by an exporter instructing an importer, or an importer’s agent, to pay a specified amount of money at a specified time.